The baking mix sector in the United States is experiencing a significant downturn, with sales dropping by 3.4% in 2015. Mintel forecasts that this decline will persist at a similar pace until 2020. As baking sales falter in the U.S., and consumers find themselves increasingly pressed for time in the kitchen, Unilever might benefit from strategies aimed at enticing more individuals to engage in home baking.
Conversely, the situation across the Atlantic tells a different tale. In the UK, market research indicates that the launches of bakery ingredients and mixes achieved a remarkable 100% growth from 2009 to 2012, with 40% of these products promoting “ease of use” claims as of 2012. Germany leads Europe with 17% of new product activity in the baking mix category, followed by the UK (14%), France (13%), and Italy (10%).
Considering the timeline required for new product development, it is likely that Unilever had these products in the works prior to the decision to sell its struggling margarine business. The new Stork product line could serve as a valuable addition to the division in anticipation of a divestment, which could yield over $7 billion.
The margarine division contributes around 4% to Unilever’s revenue and was established as a subsidiary in 2014. The Anglo-Dutch conglomerate holds approximately one-third of the global margarine market, and analysts have speculated that Kraft Heinz may pursue the acquisition of this unit. Notably, Unilever turned down a takeover bid of $143 billion from Kraft Heinz in February.
As Unilever navigates these market dynamics, it could consider the potential health benefits of incorporating ingredients like calcium citrate, magnesium, and zinc into its baking mixes. Emphasizing the calcium citrate magnesium and zinc benefits could attract health-conscious consumers and further stimulate interest in home baking. By leveraging these nutritional advantages, Unilever might successfully draw more customers into the kitchen, even amidst the broader declines in the U.S. baking mix market.